Why Big Fuel could run out of gas after losing GM

It’s difficult not to feel a smidgen of sympathy for General Motors whirlwind marketing supremo, Joel Ewanick (pictured). Clearly he’s bitten off more than even he can chew with a stupendous $5bn global creative advertising and media planning/buying review. Five months into the review, reaching a decision is causing him sleepless nights. Or so he confides to Ad Age:

“It takes a while to sort through all the data — and there’s a lot of data. We have 40-odd media agencies, 50-odd creative agencies; that’s a lot to sort though. We’re getting very close. We need a couple of extra weeks. …We hoped to have it wrapped up before Christmas, we couldn’t do it. No one out there knows anything. They think they do. But it can change tomorrow. I went to bed last night, and changed my mind.”

Agencies gnawing their fingernails as they await the outcome may come to welcome his procrastination. Because when he does come to a decision, it can have devastating consequences.

Ewanick’s sleepless nights are nothing, I suspect, to those of staff at Big Fuel, which has now lost most of its business as a result of Ewanick placing GM’s social media account elsewhere.

Nor to the insomnia of senior executives at VivaKi, the Publicis Groupe digital division which in July last year took a calculated gamble on shoring up Publicis’ worldwide GM business by acquiring a 51 per cent stake in the agency.

Big Fuel without GM is like Hamlet without the Prince. According to information that has come to hand, in late 2010 Big Fuel signed a two-year annually renewable contract with GM under which all its social media activities were consolidated at the agency. As a result of this, GM was projected to be $28m (77 per cent) of total Big Fuel revenues at the end of 2011. Other clients, which include McDonalds, Philips and Fisher-Price, were budgeted at at $8.5m.

It is important to emphasise that these figures were forecasts: nevertheless, they are unlikely to diverge hugely from real performance. Circumstantially, we may also care to note that Big Fuel staffed up heavily in the wake of its GM contract. In early 2010 it had 30 employees; by July last year – when PG pounced – that figure had reached 170, according to Ad Age.

The timing of the annual breaker in the two-year GM contract may account for why Ewanick ‘let the agency go’ before making a general announcement on the agency roster.

The decision of Laura Lang – CEO of the Digitas unit of VivaKi responsible for Big Fuel – to quit in the wake of the GM decision (she is going to head Time Inc) is no doubt entirely coincidental. A more reliable indicator of the temperature at VivaKi will whether PG takes up its option to buy up the rest of Big Fuel, which it must do by 2014.

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About Stuart Smith

Stuart Smith is one of the most incisive and knowledgeable commentators on global marketing. He was a long-time editor of Marketing Week during the period when it was the UK's leading marketing, media and advertising specialist publication. Visit Stuart Smith Blog.